Lightyear PnL tracking approach
Table of Contents
Source
Karolina Laas-Dobreva, "Improvements to How Lightyear Shows PnL", Lightyear Blog, 20 May 2026. URL: https://lightyear.com/en-eu/blog/improvements-to-pnl
Summary
Lightyear defines portfolio PnL as current value minus total cash in plus total cash out. A May 2026 update introduced five improvements: locking FX rates at deposit/withdrawal time, timeframe-aligned PnL charts, a dual-chart toggle separating portfolio value from investment-only performance, average-cost sell-order calculation with same-day estimation, and user-selectable cost basis methods (weighted average or FIFO). The changes are relevant to ORE Studio's own P&L attribution and commission tracking work because they illustrate a clean retail-grade separation of concerns that we should evaluate against our approach.
Detail
Definition of PnL
Lightyear's core formula is simple and user-facing:
PnL = current portfolio value − total deposits + total withdrawals
This is equivalent to the money-weighted approach without compounding: it measures how much better (or worse) off the investor is relative to the cash they committed.
Five improvements (May 2026)
1. FX rate locking
Each deposit or withdrawal fixes the exchange rate at the moment the cash movement occurs. Subsequent FX moves do not distort historical cost basis. This is the correct approach for multi-currency portfolios: floating rates on historical transactions create phantom gains and losses that confuse users and auditors alike.
2. Timeframe alignment
Portfolio PnL is scoped to the selected chart window (1 day, 1 month, YTD, all-time, etc.). Earlier versions apparently showed all-time PnL regardless of the selected range, which made short-term views meaningless.
3. Dual portfolio charts
Two independent chart views:
- Portfolio value — total value including uninvested cash and all movements (deposits, withdrawals, transfers).
- PnL chart — strips out cash movements to show pure investment performance. This is what most institutional P&L reports call "trading P&L" or "investment return".
The toggle gives retail users a concept that institutional systems take for granted: separating wealth evolution from investment alpha.
4. Sell-order calculation
On sale, the app:
- Computes realised gain using weighted average cost, consistent with their Capital Gains Statements (tax reporting).
- For same-day sales, shows an estimated gain using 5-minute FX rates immediately.
- Updates to final figures using end-of-day FX rates once settlement closes.
The two-phase display (estimated → final) is honest UX that matches the operational reality of T+1/T+2 settlement.
5. Selectable cost basis methods
Users can choose via account settings:
- Weighted Average Cost (default) — each lot blended into a running average; simpler and stable across re-purchases.
- First In, First Out (FIFO) — oldest lots sold first; often preferable for tax optimisation in certain jurisdictions.
Lightyear exposes this as a user preference rather than a regulatory default, which implies they operate in jurisdictions where either method is acceptable.
Relevance to ORE Studio
| Lightyear concept | OreStudio relevance |
|---|---|
| FX locking at cash event | Commission: currency story; cost basis in multi-CCY positions |
| Timeframe-scoped PnL | P&L attribution windowing; dashboard chart scoping |
| Investment-only PnL chart | Separating fee/commission P&L from trading P&L in reports |
| Two-phase estimated/final | Intraday vs EOD valuation; settlement-aware P&L |
| FIFO vs WAVG toggle | Cost basis method selection per account; tax reporting module |
See also
- pl_attribution — internal domain knowledge on P&L attribution.
- Commission: currency — in-flight story dealing with multi-currency cost basis, directly related to Lightyear's FX locking approach.